The monetary policy transmission mechanism and the role of money market funds in the Eurozone
Abstract
This paper investigates the pass-through mechanism of monetary policy through money market funds and bank loan rates under conventional and unconventional monetary policy. Using the Autoregressive Distributed Lag method, spanning the period 2003-2018, the findings document that the pass-through of bank loan rates is weaker than that of MMF rates (0.642 vs 1.044, respectively), especially during the unconventional monetary policy period (0.637 vs 1.568, respectively). They highlight that in this period, banks earned less from traditional lending business, due to low or even negative rates, while taking increasingly large risks.Citation
Apergis, N., Hayat, T. and Saeed, T. (2020). 'The monetary policy transmission mechanism and the role of money market funds in the Eurozone'. Economics Bulletin, 40(2), pp. 1249-1260.Publisher
Scimago JournalJournal
Economics BulletinAdditional Links
http://www.accessecon.com/pubs/eb/http://www.accessecon.com/Pubs/EB/2020/Volume40/EB-20-V40-I2-P106.pdf
Type
ArticleLanguage
enISSN
1545-2921Collections
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